The period of ineligibility does not apply to an individual who transfers resources to a trust if either of the following is true:

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  the portion of the trust attributable to the transferred resources is a countable resource of the individual (i.e., the trust is countable as a resource for purposes of determining SSI eligibility). (See SI 01120.200.)

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  the trust would be considered a countable resource but for the undue hardship provision applicable to trusts.

The period of ineligibility does not apply to an individual who transfers a resource to a trust established for the sole benefit of the individual's child of any age who is blind or disabled. This includes trusts qualifying as “Medicaid trust exceptions” in SI 01120.200 ff. (i.e., trusts established under Section 1917(d)(4)(A) and (C) of the Social Security Act).

The period of ineligibility does not apply to an individual who transfers a resource to a trust established for the sole benefit of an individual including himself or herself who is under age 65 and is blind or disabled. This includes trusts qualifying as “Medicaid trust exceptions” in SI 01120.200 ff. (i.e., trusts established under Section 1917(d)(4)(A) and (C) of the Social Security Act).

If the trust is not countable as a resource, money or property transferred by the individual into the trust is a transfer of resources that is subject to the period of ineligibility unless one of the exceptions in SI 01150.121A.2. or SI 01150.121A.3. applies.

If a disbursement is made from a trust that is counted as a resource (or would be counted as a resource but for the undue hardship provision applicable to trusts), and the disbursement is not made to the individual or for his/her benefit, then the disbursement is considered a transfer of resources for less than fair market value. Such a transfer of resources is subject to the period of ineligibility. The date of the disbursement is considered the date of the transfer. See SI 01120.200 ff. for discussion of disbursements from trusts.

If the individual takes action so that no disbursement can be made from a trust that is counted as a resource to the individual for any reason, this action causes the trust to no longer be counted as a resource. Therefore, such an action is considered a transfer of resources for less than fair market value. Such a transfer of resources is subject to the period of ineligibility. The date of the action restricting disbursements is considered the date of the transfer.

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  Verify the amount of the transfer, the transfer date, and that the funds went into the trust considering the individual's statement either signed or recorded on a Report of Contact page, and available documents (e.g., bank statements, receipts, trust documents, etc.). The individual's statement, by itself, is not sufficient evidence.

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  As needed, verify that the individual for whom the trust was established meets the SSI requirements for blindness or disability. (See SI 01150.121D.)

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  As needed, verify that the individual for whom the trust was established is the child of the transferor. (The supplemental security record (SSR), master beneficiary record (MBR), or Numident may be used.)

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  As needed, verify that the trust was established for the sole benefit of the child or individual by reviewing the trust documents. (See SI 01150.120C. for discussion of “sole benefit”.)

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  Follow the guidelines in SI 01120.200 ff. to determine whether the trust is a resource of the individual.

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  If the trust is not a resource, the transfer exception does not apply and the individual may be ineligible due to the transfer of resources.

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  If the trust is a resource, the transfer exception applies. It will be necessary to determine if the individual is ineligible for SSI due to counting the trust as a resource.

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  If the exception applies, do not establish a period of ineligibility due to the resource transfer. Document the file with the adjudicator's determination. For example: “Resource transferred on 2/5/00. Meets exception for transfer to a trust per SI 01150.121. Period of ineligibility does not apply.”

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  Record the evidence used on the EVID screen found in the Shared Processes Menu (MS 01701.003).

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  Include in the file a copy of the trust document if not already in file based on the requirements in SI 01120.200J. for documenting a trust.

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  Record the determination on systems using the File Documentation Notes section of the Property/Cash Given or Sold page or Report of Contact page (MS 08122.010). On non-systems cases, use a Report of Contact.

Notify the State Medicaid agency about the transferred resource unless the SSI claim is denied. (SI 01150.012)

Assume that a child or individual who was eligible for SSI benefits based on blindness or disability at the time of the transfer meets the definition of blindness or disability for purposes of this exception. For this purpose, “eligible” includes an individual in a payment suspension status but not in a payment termination status.

If the individual who received the transferred resource was not eligible for SSI benefits based on blindness or disability at the time of the transfer, obtain a disability determination from the disability determination services (DDS) as follows: